Competitive analysis is critical in product lifecycle management (PLM) as it allows you to understand your market and future growth challenges. Also, businesses identify their competitors and their internal attributes using competitive intelligence services.
Besides, companies evaluate how well their products and services perform compared to the offerings of their business rivals. This post will discuss
How to Conduct a Competitive Analysis Comprehensively.
1 | Specify Your Target Market
You must first define the market in which you operate, i.e., its size and growth rate. Most competitive intelligence firms advise this approach to enhance the efficiency of competitive analysis.
For example, if you are a pet food company catering to felines, it is easier to pinpoint who your competitors and customers are. However, if you sell dog food and cat food, the market definition has an extensive scope.
Targeting a diverse market at once is a demanding endeavor. Therefore, businesses avoid tackling different market segments simultaneously. Kindly focus on a specific consumer need or niche to streamline your competitive intelligence (CI).
2 | Define Your Main Competitors
After defining your market, look at what other brands are doing within that space. Consider the following questions to strategize how you conduct your competitive analysis.
- How do they address consumer needs or wants?
- What differentiates your business rivals from one another?
- How do competitors position themselves while competing with other companies in your industry?
- What value propositions do they communicate through their products or services?
When competitive intelligence firms analyze these questions, you get to improve your positioning strategy. After all, the data analytics consulting services use this CI dataset to generate insights.
3 | Define Your Objective
You must define the objectives of conducting your competitive analysis. You want to do this before investigating other data.
- What is the consumer problem you intend to address via your offerings?
- What is the goal you are trying to achieve?
- What is the desired outcome?
- What will you use as the business case evaluation metric for this analysis?
After this step, you can begin to identify your competitor’s products, services, and pricing strategies. We suggest this step when performing an initial competitive analysis as a part of competitive intelligence services.
4 | Scope Out Your Competition
You must investigate the strengths of rival brands to conduct a thorough competitive analysis. Also, you must recognize how they fit into their market and what type of marketing strategy they use.
Businesses want to understand what products or services their rival brands offer. Likewise, the managers and teams must learn how the competitors apply and modify their pricing strategies.
In addition, you must find out how the competition is selling their products and services. A database about the sales in your rival organization is vital in competitive intelligence services.
5 | Select Metrics to Track
The metrics you choose to track will be unique to your business. But here are some standard metrics that can help you identify areas of improvement.
- Customer retention rate,
- Net promoter score (NPS),
- Conversion rate,
- Monthly recurring revenue (MRR)
Competitive analysis requires the above datasets. Later, consulting services in the data analytics domain can study these databases to understand how your rival’s business grows or shrinks.
6 | Monitor the Competition Over Time
Imagine you have completed your competitive analysis, but that does not mean you can relax or ignore your competitors’ next moves because keeping an eye on the competition over time is necessary.
You should continue to monitor the performance of your competitors and how they change their business strategies. Doing so facilitates the quality assurance of data analytics consulting services.
Assume a competitor improves their product or service. In this case, you want to take note of this improvement and consider how it could affect your business dynamics.
Also, if your competitors encounter financial difficulties, this event allows you to surpass their growth with fewer efforts. In essence, you attempt to attract their customers while your competitors cannot serve them well.
7 | Know Internal Business Variables and Industry Trends
Is knowledge of your competitors essential in the business world? Yes, it has a high value in the eyes of professional competitive intelligence firms.
However, do not stop at one competitor analysis. Most competitive intelligence services treat competitor analysis as a component of a broader investigation.
Remember, you cannot be competitive if you do not know yourself (your business). Managers must discover the answers to the following questions.
- Who are your customers?
- What do they buy from your brands?
- What are the preferences of your customers?
- Why do they buy from your company instead of the competing products?
You must build a knowledge base of your industry space. How does your industry function? Companies must understand what moves their industry today. Also, what might happen to your industry practices tomorrow?
You do not need to study every competitor. But you must understand how the operating business models differ before you conduct a competitive analysis.
A business leader cannot ignore the industry dynamics. Additionally, your competitiveness will change over time. Also, this principle affects your competitors and other companies in your industry.
Competitive analysis is complex; you must be clever about defining your metrics. Otherwise, your competitive intelligence (CI) might become saturated with excess data.
A leader in competitive intelligence services, SG Analytics, empowers global enterprises with high-quality insights into their competitors and industries. Contact us today if you seek to leverage our vast data processing capabilities and unlock impressive business growth.